Bitcoin: An Asset Class in Itself?

• BlackRock CEO Laurence Fink called Bitcoin “an asset class in itself.”
• The firm offers both a Bitcoin and Ethereum ETF.
• In the 25 years since the BlackRock IPO, the stock has returned 21% annually.

On BlackRock’s (NYSE:) third-quarter earnings call, CEO Laurence Fink discussed , the election, and the firm’s 25th anniversary

On the firm’s third-quarter earnings call, BlackRock CEO Laurence Fink made a stark acknowledgment in calling Bitcoin an asset class.

This is not the first time Bitcoin has been categorized as such, but coming from the CEO of the world’s largest asset management firm, it is significant, signaling, perhaps, the growing acceptance and relevance of Bitcoin among institutional investors.

“I mean, we believe Bitcoin is an asset class in itself,” Fink said on the Q3 earnings call. “It is an alternative to other commodities like ,”

Will the Election Have An Impact on Crypto?

Fink’s comment on Bitcoin as an asset class came in response from a question by Barclays analyst Ben Budish, who asked about whether he expects to see new opportunities for digital assets after the U.S. presidential election.

“Well, first, I’m not sure either president or either candidate would make a difference,” Fink said.

“I do believe the utilization of [digital] assets are going to become more and more of a reality worldwide. Conversations we’re having with institutions worldwide, conversations about: How should they think about digital assets? What type of asset allocation there should be? I mean, we believe Bitcoin is an asset class in itself.”

Fink also commented on , and whether or not he’s concerned about over-regulation in this space.

“The role of Ethereum as a blockchain can grow dramatically. So, if we can create more acceptability, more transparency, more analytics related to these assets, then it will be expanded.

“I truly don’t believe it’s a function of regulation — of more regulation, less regulation. I think it’s a function of liquidity, transparency. I truly believe we will see a broadening of the market of these digital assets.”

BlackRock is invested in the success of cryptocurrency through its Bitcoin and Ethereum exchange-traded products. The iShares Bitcoin Trust (NASDAQ:) is the largest of the Bitcoin ETF with $23 billion in assets since it launched in January. Also, its iShares Ethereum Trust ETF (NASDAQ:) has amassed $1 billion in assets since it debuted over the summer.

25 Years of Growth

The third quarter earnings call came just days after BlackRock celebrated its 25th anniversary as a public company on October 1. Since that time, BlackRock stock has grown from roughly $14 per share to the current price of approximately $1,012 per share — an all-time high.

That represents a total return of 7,128% across 25 years. That comes out to 18.6% on an annual basis — and 21% annually if the dividend is reinvested. In contrast, the has returned about 8.2% on an annualized basis over the past 25 years. Further, Fink said that BlackRock has beaten the S&P 500 in 19 of those 25 years.

Looking ahead, Fink is bullish on the firm’s future, seeing big growth opportunities in private markets.

This month, BlackRock closed on its acquisition of Global Infrastructure Partners, a leading investment fund manager for infrastructure investments in private markets. And earlier this year it acquired Preqin, a data provider for private markets. The two acquisitions form the basis of BlackRock’s expansion into private markets investing.

“We’re not going to look at private markets in the same way like — we’re not going to say they’re alternatives,” said Fink. “They’re just part of the marketplace itself. And one of the reasons why we were so driven to acquire Preqin, we believe that data and analytics will accelerate that movement of making public and private ubiquitous together.”

BlackRock stock is currently up 27% YTD and has a median price target of $1,102 per share, which is 7% higher than the current price.

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